What Can We Conclude About Salasar Techno Engineering's (NSE:SALASAR) CEO Pay?

Alok Kumar has been the CEO of Salasar Techno Engineering Limited (NSE:SALASAR) since 2014, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Salasar Techno Engineering

How Does Total Compensation For Alok Kumar Compare With Other Companies In The Industry?

According to our data, Salasar Techno Engineering Limited has a market capitalization of ₹3.6b, and paid its CEO total annual compensation worth ₹8.0m over the year to March 2020. That's a notable increase of 10.0% on last year. Notably, the salary of ₹8.0m is the entirety of the CEO compensation.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹4.8m. This suggests that Alok Kumar is paid more than the median for the industry. What's more, Alok Kumar holds ₹472m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. Speaking on a company level, Salasar Techno Engineering prefers to tread along a traditional path, disbursing all compensation through a salary. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Salasar Techno Engineering Limited's Growth

Over the last three years, Salasar Techno Engineering Limited has shrunk its earnings per share by 22% per year. Its revenue is down 36% over the previous year.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Salasar Techno Engineering Limited Been A Good Investment?

Given the total shareholder loss of 6.8% over three years, many shareholders in Salasar Techno Engineering Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Salasar Techno Engineering pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As previously discussed, Alok is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Disappointingly, share price gains over the last three years have failed to materialize. To make matters worse, EPS growth has also been negative during this period. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 5 warning signs for Salasar Techno Engineering you should be aware of, and 1 of them is concerning.

Important note: Salasar Techno Engineering is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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